The Sensex gained 0.92 percent or 156.80 points on Friday to close at 17,233.98 points, the highest level in almost 10 weeks.
According to analysts, Indian markets may witness some corrections this week with investors booking profits in the wake of a substantial gain of 1,716.06 points registered so far this month.
"Long term patterns on the charts suggest that 5250 on the Nifty and 17300 for the Sensex look extremely challenging and some profit booking is expected around these levels," said Rakesh Gandhi, Sr Technical Analyst of LKP Securities Ltd.
"However, medium term trend can get weak only if the Nifty falls below 5000 level in this week otherwise the momentum remains intact and we could see some mid-cap stocks gaining momentum," added Rakesh.
The BSE benchmark index Sensex has rallied over 11 per cent this month on the back of hectic buying from foreign institutional investors.
The 50-share Nifty index is now trading near its very crucial resistance zone of 5200-5250 and hence profit booking is likely to emerge in the near term. The 50-share Nifty index is trading near its trend-line resistance level and is also near 200 DMA.
"We expect Nifty to consolidate in the 4900-5250 zone in the near term. The support levels are 5140, 5050 and 4960. On the upside, a move beyond 5260 is likely to reverse the downtrend in Nifty and in that case, the resistance levels would be 5320, 5400 and 5550," said Vinit Pagaria, VP - Investment Strategies, Microsec Capital Ltd
"Profit booking may emerge in stocks like DLF, HDFC, PNB, BHEL, Jaiprakash Associates and State Bank of India while Information Technology stocks like Infosys and TCS appear strong," added Vinit.
Asian shares edged lower on Monday as markets cautiously tuned in to a likely debt swap deal for Greece which might help the debt laden country to avoid default.
"At the summit, EU leaders will sign off on a permanent rescue fund for the euro zone and are expected to agree on a balanced budget rule in national legislation," according to a Reuters report.
The debt swap agreement would not be reached in time for the European Union summit meeting later on Monday.
At 08:00 AM, Nifty India stock futures in Singapore were down 36 points at 5,177.50, indicating a negative opening in the domestic market.
Important Results to watch out for:
Allahabad Bank, Balrampur Chini Mills Ltd, Glenmark Pharmaceuticals Ltd, Havells India Ltd, Indian Bank, Noida Toll Bridge Company Ltd, PVR Ltd, United Phosphorous Ltd and United Textiles Ltd.
Stocks in news:
IT stocks will be in focus after the NASSCOM said in a report that Indian technology companies are likely to forecast a slowdown in software exports in 2012-13, as corporations keep a wary eye on the global economic uncertainty.
NMDC will be in focus after the Ministry of Environment and Forests (MoEF) has rejected clearance to one of the iron-ore mines of the state owned company in Bailadila district, Chhattisgarh.
NTPC after the state owned company signed a USD 1.5 billion deal with Bangladesh to build a 1,320 MW coal-fired power plant, the country's biggest, to help ease acute power shortages.
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